The City’s Case against Transparency 2

Below is the exchange at the Court of Common Council meeting on 4 March between the Hackney Preacher and the Chairman of Policy, Mark Boleat.

In it the Chairman states that the City cannot support the legislation before Parliament to see the publication of registers of beneficial ownership because what is proposed is a unilateral initiative and transparency should only be pursued if it is done with a “coordinated international approach”.

Besides, he adds, the Crown Dependencies and Overseas Territories have now cleaned up their act and function “as fair and open tax systems” (he quotes the Prime Minister).

He adds that this is the first time he has spoken on this matter because “it is a new issue and it is not standard practice to have registers of beneficial ownership.”

Mark Boleat, the Chairman of Policy, is also Chairman of the Jersey Competition Regulatory Authority, the Guernsey Competition and Regulatory Authority and the States of Jersey Development Company.

William Campbell-Taylor: My lord mayor, in the light of recent allegations over the role of elements of the UK’s financial services industry in international tax avoidance – indeed the widespread public concern that this is about this – does the Chairman of Policy agree with me that the City of London Corporation should publicly support the Prime Minister and his cross party allies in calling for the publication of the registers of beneficial ownership in the UK’s overseas territories and crown dependencies, my Lord Mayor?

Mark Boleat (Chairman of Policy): My Lord mayor, may I thank the honourable member for giving given me notice of his question. The issue that the honourable member for Portsoken has raised is an important one and indeed it has been raised with me on a number of occasions recently.

Leaving aside the important difference between tax avoidance and tax evasion, the key point I want to stress is that any effort to coordinate transparency needs to be coordinated at a international level. It should not be narrowly limited in scope and it should not place expectations on some not demanded of others.

The implication of the question for the court is that the UK’s Crown Dependencies and Overseas Territories are somehow dragging their feet on this issue. In fact the UK does not have registers of beneficial ownership, nor do most other territories.

So it’s difficult to see why the crown dependencies and overseas territories should be expected to do something that is not done here in the UK.

There is legislation currently before parliament on this matter but it is controversial precisely because it is not in line with international practice and therefore would have limited impact.

As policy chairman I’m sure it would be the wish of this court that I would voice the support of the City Corporation for coordinated international approach to this issue, my Lord Mayor

William Campbell-Taylor: My Lord Mayor, I’d like to thank the Chairman of Policy for outlining some of his concerns about offering support for this register of beneficial ownership and identifying the risk of going it alone, as it were, in the UK and of using the position that we have with our Overseas Territories and Crown Dependencies to show leadership in this matter. There are further arguments I’m sure he would wish to make against this, but may I confirm that this is this the first time that he as chairman has made a statement on this matter on behalf of the court, my Lord Mayor?

Mark Boleat: My Lord Mayor, the simple answer to the question is ‘yes’, but let us remember that this is a new issue that has been raised. It is not currently standard practice, including in the United Kingdom to have registers of beneficial ownership and therefore the issue has not been on the agenda.

It has been put on the agenda following agreement of either the G8 or G20 a few years ago and work is being looked at internationally on this point.

The question is very narrowly connected towards the Crown Dependencies and the Overseas Territories. And I answered specifically that it would seem unreasonable and it that this is not the intention of the Prime Minister that conditions or requirements should not be imposed upon them that are not imposed on other jurisdictions, including the UK itself.

Perhaps on this I could quite what the PM says in the House of Commons on the 9 Sept 2013 he said

“I do not think it is fair any longer to refer to any of the Overseas Territories or Crown Dependencies as tax havens. They have taken action to make sure they have fair and open tax systems. It is very important that our focus should now shift to those territories and countries that really are tax havens.

The Crown Dependencies and Overseas Territories which matter so much quite rightly to the British people and to members have taken the necessary action.”

My Lord Mayor.

There followed a supplementary question from Mr Mark Wheatley on whether the City may legitimately take a position that publicly seeks to influence the policy of a Westminster party during or immediately preceeding an election period?

Mark Boleat: “The answer must be yes otherwise we would not be doing our job in representing the City. In fact members will be aware that the policies of the City Corporation do not always represent policies coming out of Westminster or indeed any political parties. There have been times when we have sought to change the minds of government.

As for the position immediately preceding a general election, the City Corporation has a longstanding tradition of neutrality between the political parties and I hope that members would agree that we should maintain this particularly in the sensitive period up until a general election.”